Weighted Average Method, Journal Entries

Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February:

		Molding		Assembly
Beginning inventories:
Physical units		10,000		8,000
Costs:
Transferred in				$45,300
Direct materials		$22,000
Conversion costs		$13,800		$16,800
Current production:
Units started		25,000		?
Units transferred out		30,000		35,000
Costs:
Transferred in				?
Direct materials		$56,750		$40,250
Conversion costs		$106,900		$136,500
Percentage of completion:
Beginning inventory		40%		50%
Ending inventory		80		50

Required:

Question Content Area

1. Using the weighted average method, prepare the following for the Molding Department:

a. A physical flow schedule

Molding Department, Physical flow schedule:
Units to account for:	blank
Started and completedUnits, beginning work in processUnits, ending work in processUnits, beginning work in process	Units, beginning work in process
Started and completedUnits, ending work in processUnits started in FebruaryUnits, ending work in process	Units, ending work in process
Total units to account for	fill in the blank 7ba1e9079fc7fb1_5
Units accounted for:	blank
Units completed and transferred out:
Started and completedUnits, beginning work in processUnits started in February	- Select -
From beginning work in processTotal units accounted forUnits completedUnits transferred out	- Select -
Units, beginning work in processUnits, ending work in processUnits started in February	- Select -
Total units accounted for	fill in the blank 7ba1e9079fc7fb1_12

Feedback Area

Feedback

a. The physical flow schedule traces the units in process regardless of their stage of completion.

Question Content Area

b. An equivalent units calculation

	Total equivalent units
Direct Materials	fill in the blank 464021fc8f9dfc5_1
Conversion Costs	fill in the blank 464021fc8f9dfc5_2

c. Calculation of unit costs. Round your intermediate computations and final answer to four decimal places. $fill in the blank 464021fc8f9dfc5_3 per unit

d. Calculate the cost of ending work in process and cost of goods transferred out. Round your answers to the nearest dollar. Cost of ending work in process: $fill in the blank 464021fc8f9dfc5_4 Cost of goods transferred out: $fill in the blank 464021fc8f9dfc5_5

e. A cost reconciliation. When required, round your answers to the nearest dollar.

Costs to account for:
Beginning work in process	$fill in the blank 464021fc8f9dfc5_6
Costs incurred	fill in the blank 464021fc8f9dfc5_7
Total costs to account for	$fill in the blank 464021fc8f9dfc5_8

Costs accounted for:
Transferred out	$fill in the blank 464021fc8f9dfc5_9
Ending work in process	fill in the blank 464021fc8f9dfc5_10
Total costs accounted for	$fill in the blank 464021fc8f9dfc5_11

Feedback Area

Feedback

b. To calculate equivalent units, weighted average counts prior-period output in BWIP as belonging to the current period. All units are output in the current period.

c. Unit cost = Unit direct materials cost + Unit conversion costs

d. Costing out ending work in process is done by computing the cost of each input and then adding to obtain the total. The valuation of cost of goods transferred out is simplified as it is the total unit cost multiplied by the units completed.

e. Reconciliation is making sure that the costs assigned to goods or services completed and EWIP are equal to the costs to account for.

Question Content Area

2. Prepare journal entries that show the flow of manufacturing costs for the Molding Department. (a) Materials are added at the beginning of the process, (b) conversion costs are recorded, and (c) units are transferred to the Assembly Department. When required, round your answers to the nearest dollar.

a.	Conversion Costs-ControlFinished GoodsMaterials InventoryWork in Process-MoldingMaterials Inventory	Materials Inventory
	Accounts PayableCashMaterials InventoryOverhead ControlWork in Process-AssemblyOverhead Control		Overhead Control
b.	CashConversion Costs-ControlFinished GoodsMaterials InventoryWork in Process-MoldingWork in Process-Molding	Work in Process-Molding
	Accounts PayableCashConversion Costs-ControlOverhead ControlWork in Process-AssemblyOverhead Control		Overhead Control
c.	CashConversion Costs-ControlFinished GoodsMaterials InventoryWork in Process-AssemblyWork in Process-Assembly	Work in Process-Assembly
	CashConversion Costs-ControlMaterials InventoryWork in Process-AssemblyWork in Process-MoldingCash		Cash

Feedback Area

Feedback

2. An example of journal entries showing the flow of costs is illustrated above Exhibit 6.5.

Question Content Area

3. Repeat Requirements 1 and 2 for the Assembly Department.

a. A physical flow schedule:

Assembly Department, Physical flow schedule:
Units to account for:	blank
Started and completedUnits, beginning work in processUnits, ending work in process	- Select -
Started and completedUnits, ending work in processUnits started in February (transferred in)	- Select -
Total units to account for	fill in the blank 3f023d08303b05f_5
Units accounted for:	blank
Units completed and transferred out:
Started and completedUnits, beginning work in processUnits started in February (transferred in)	- Select -
From beginning work in processTotal units accounted forUnits completedUnits transferred out	- Select -
Units, beginning work in processUnits, ending work in processUnits started in February (transferred in)	- Select -
Total units accounted for	fill in the blank 3f023d08303b05f_12

Feedback Area

Feedback

3. Read the problem carefully. There are some differences in how the material additions are accounted for.

Question Content Area

b. An equivalent units calculation

	Total Equivalent Units
Direct Materials	fill in the blank 15aac704206e01c_1
Conversion Costs	fill in the blank 15aac704206e01c_2
Transferred In	fill in the blank 15aac704206e01c_3

c. Calculate the total unit costs. Round your intermediate computations and final answer to four decimal places. $fill in the blank 15aac704206e01c_4 per unit

d. Calculate the cost of ending work in process and cost of goods transferred out. Round your answers to the nearest dollar. Cost of ending work in process: $fill in the blank 15aac704206e01c_5 Cost of goods transferred out: $fill in the blank 15aac704206e01c_6

e. A cost reconciliation. If required, round your answers to the nearest dollar.

Costs to account for:
Beginning work in process	$fill in the blank 15aac704206e01c_7
Costs incurred	fill in the blank 15aac704206e01c_8
Total costs to account for	$fill in the blank 15aac704206e01c_9

Costs accounted for:
Transferred out	$fill in the blank 15aac704206e01c_10
Ending work in process	fill in the blank 15aac704206e01c_11
Total costs accounted for	$fill in the blank 15aac704206e01c_12

Note: Cost reconciliation totals differ due to rounding error.

Feedback Area

Feedback

3. Read the problem carefully. There are some differences in how the material additions are accounted for.

Question Content Area

Prepare journal entries that show the flow of manufacturing costs for the Assembly Department. (a) Materials are added at the end of the process, (b) conversion costs are recorded, and (c) the units are transferred to Finished Goods.

a.	CashConversion Costs-ControlMaterials InventoryWork in Process-AssemblyWork in Process-Molding	- Select -
	Accounts PayableCashFinished GoodsMaterials InventoryWork in Process-Molding		- Select -
b.	CashConversion Costs-ControlMaterials InventoryWork in Process-AssemblyWork in Process-Molding	- Select -
	CashConversion Costs-ControlCost of Goods SoldFinished GoodsWork in Process-Molding		- Select -
c.	Accounts PayableCashConversion Costs-ControlFinished GoodsMaterials Inventory	- Select -
	Accounts PayableCashFinished GoodsWork in Process-AssemblyWork in Process-Molding		- Select -